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Industry warns of ‘legal nightmare’ over reforms

EUROPEAN company chiefs warned this week that Competition Commissioner Mario Monti’s proposals to reform EU anti-trust rules are the recipe for a legal nightmare that could threaten new investment and jobs.

But the Swedish presidency, which next week hosts a summit aimed at making the EU the most competitive economy in the world, admits the issue may be too hot to handle.

Monti tabled proposals last year that would give national authorities most of the responsibility for policing hard-core cartels. A key reform is a plan to end the ‘notification system’, which requires firms to seek Commission approval for the mostly harmless agreements they make with rivals – such as joint distribution or marketing deals.

But UNICE, the federation of employers from Union countries, warns that Monti’s reforms would plunge firms into a mire of legal uncertainty “which would deter investment in the EU and expose companies to unacceptable risks”.

A particular problem, says the group’s competition-policy expert Erik Berggren, is that companies would lose their legal inoculation against future fines when they write to the Commission about their deals – even though they would have to volunteer information for a special ‘register of agreements’.

He argues the Commission’s proposals would leave firms at the mercy of “thousands of national judges” to solve disputes over alleged abuses. Worse still, he claims, the proposals do not specify which authority would take precedence.

In a paper on the issue sent to Union diplomats, UNICE calls for clear rules to ensure that only one authority has power to rule on a particular case and that companies can seek guidance on the legality of the deals.

The lobby also urges member states to leave alone a part of the Monti blueprint firms actually support: a plan to impose EU competition law in cases heard by national judges involving trade between member states.

Stockholm is currently running Union-level discussions on the reform proposals. But the diplomat chairing the talks admits member states are unlikely to agree on changes to the plan before the EU presidency rotates to Belgium on 1 July.

“The topic is so difficult that we might need to have quite a long period of time to mature the problem,” he said.